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Increased mortgage rates yield fewer applications

Posted on Thursday, May 23, 2013 at 11:17:15 AM

As national mortgage rates averages ticked up for the third consecutive week, fewer consumers were seen applying for loans. Though the recent rises may have deterred some individuals from pursuing residential financing and purchasing property, lending conditions still largely favor borrowers and the latest data points toward the continued strengthening of the national housing market. 

Freddie Mac reported of increases for both fixed- and adjustable rate mortgage products in its Primary Mortgage Market Survey for the week ending May 23.

Average 30-year FRMs were recorded at 3.59 percent last week after moving up from the preceding week's reading of 3.51 percent. Meanwhile, 15-year FRMs ticked up to 2.77 percent from its previous position at 2.69 percent. Five-year treasury-indexed hybrid ARMs improved to 2.63 percent from 2.62 percent, while one-year treasury-indexed hybrid ARMs held firm at the level of 2.55 percent - which was seen the week prior. 

In its Weekly Mortgage Applications Survey for the week ending May 17, the Mortgage Bankers Association announced the seasonally adjusted measure of home loan application volume dropped nearly 10 percent from the week before. Additionally, the Purchase Index was seen decreasing 3 percent, while the Refinance Index declined 12 percent. 

Though some prospective homeowners may have delayed their plans to apply for residential lending, rates are still in a significantly better position than they were during the same time last year.